This blog is about struggles for the control of corporations. For the most part, I'll focus on public corporations headquartered in the United States, issuing securities according to the rules stipulated by the SEC in Washington and (typically) governing their affairs by the laws and judicial decisions of the state of Delaware.
My own prejudices are ... well, I think I'll let you work them out as we proceed day to day.

Wednesday, September 30, 2009

Sequenom Shake-up

The former Chief Executive of Sequenom Inc., Harry Stylli, is out of a job effective as of Monday, September 28. So are three of the other officers of that biotech company: including the CFO and the head of R&D.

Sequenom, a company based in San Diego, Calif., owns a proprietary DNA analysis platform. (And no, I'm not quite sure that that means -- it sounds like a software system for genetic/diagnostic tests.)

A year ago, shares of Sequenom (Nasdaq: SQNM) were worth more than $21, and the most promising product in its pipeline was a new system for the prenatal diagnosis of Down Syndrome, a system that was said to be both safer and more comfortable (for both mother and fetus) than the diagnostic methods now in use.

Unfortunately, the data for the tests that were underway last year can not be relied upon. On Monday, along with Stylli's departure, Sequenom announced the result of its investigation of problems, specifically mishandling "the protocols and controls for the conduct of studies" on its Down Syndrome screen. This was of course a huge setback, although it had already been largely discounted in the stock price.

The company came under some criticism in the business press (though for reasons unrelated to the Down Syndrome product and its specific difficulties) last October. The price fell from $21 to, by Thanksgiving 2008, about $14. Then it recovered, getting all the way to above $24 in time for the inauguration of a new President. The inauguration was accomnpanied by optimism in its sector, because the new administration was and is widely thought of as friendly to investment in bio-medical research.

But then the price started to slide, as if the market as a collective organism thought something big was in the offing. The price was back at $14 just before the first official announcement of the data's unreliability in late April -- and the start of the investigation just completed -- then the price bellyflopped immediately to $3.30 a share. It has been flailing along at the bottom of the price chart ever since, although as some life was coming back to the broader market some life seemed to be returning to this stock, too, and it got back to $6.

Then came this annoucement of the results of the investigation and the executive suite shake-up Monday evening, after trading had closed. Yesterday, Tuesday, the stock was back to the mid-spring 2009 prices, between $3 and $4.